The case that launched a 'reverse sting'

BySteve DinnenMarch 5, 2001

Telemarketing-fraud detection owes a lot to Rita Hierstein.

Ms. Hierstein was a pensioner in Waukee, Iowa, who was a soft touch for telemarketers, Slowly but steadily, they were looting her bank accounts with promises of bogus prizes, questionable vacations, and worthless trinkets.

In 1993, Hierstein's bank contacted the Iowa Attorney General's office about her withdrawals and soon she was confessing her predicament and asking for help. She figured one way to duck the scammers was to cancel her telephone number, and at that point Ray Johnson, Iowa assistant attorney general, came up with a better idea.

"Can we have your number?" he asked. Hierstein agreed, and soon her old telephone number - well known by telemarketers - was ringing into the attorney general's consumer-protection division. Trained investigators posing as the 80-year-old Hierstein were talking to telemarketers and tape-recording their pitches.

Authorities convicted a telemarketer from Texas of trying to dupe Hierstein, and in 1994 their reverse sting resulted in charges against scammers from Georgia and Arizona who had called her line. In all, nearly 40 people have been convicted in Iowa, using telephone numbers provided by Hierstein and other elderly Iowans who have been preyed upon by swindlers.

Mr. Johnson, who's still with the Iowa Attorney General's office, says that over time his office collected many tapes of telemarketers. Eventually they contacted the FBI's Boiler Room Task Force in San Diego, where federal authorities were just then trying to figure out how to catch fraudulent telemarketers in the act. Many states require both parties to a conversation to consent to its recording, while federal law and those of Iowa and a dozen-plus other states allow only one side to consent.

Soon, state and federal authorities were taking over telephone lines of many victims of telemarketing fraud. These were people who had been routinely cheated, as telemarketers will circulate "mooch lists," or rosters of people who have been duped before and may again.

Steve Peak, an assistant US attorney in San Diego, says lines were ringing into the homes of retired FBI agents and volunteers from the American Association of Retired Persons. From San Diego, Peak says the FBI "franchised" its taping program to FBI offices in Las Vegas; Houston; Buffalo, N.Y.; and other cities, leading to thousands of arrests and shutting down dozens of boiler rooms. Other states - Ohio is a notable example - have copied Iowa and taped crooks, which can be crucial evidence when elderly defendants are trying to recall 2- or 3-year-old conversations.

"The taping concept has probably been responsible for more convictions in this area than any other [crime-fighting] tool," says Mr. Peak.

Rita Hierstein died in Indianapolis in 1997. Her sister, Charlotte Broderick, says she was glad to hear that Rita was able to leave behind a bit of a legacy after being hounded so badly by telemarketers.